The Daily View: Imminent action
WITH the US fully focused on Iran, its strategic plan for Russian sanctions has taken something of a backseat of late.
The Trump administration allowed its temporary waiver that suspended sanctions on Russian crude oil to expire this weekend, further tightening global supply as tensions rise in the wake of the failed peace negotiations between the US and Iran. But there is little clarity regarding the next steps Washington may, or may not, take to curb Moscow’s oil profits.
One thing is clear though — the US is not prepared to back Europe’s plan to override the oil price cap with a full maritime services ban. With no backing from the US or G7 partners, that plan has now been shelved in Brussels and European states are turning their attention to the new plan — Operation Shadow Disruption.
Now Viktor Orbán is safely out of the way in Hungary, the stalled 20th package of sanctions against Russia is expected to pass shortly, along with a stalled loan of €90bn ($106bn) for Ukraine. Assuming the package finally receives approved, that will see yet more shadow fleet tankers targeted and extend the list of financial intermediaries supporting the shadow fleet, closing at least some of the current loopholes. But it won’t materially change the EU sanctions muscle.
What is notably different is the new plan to seize as many of the fraudulently flagged shadow fleet tankers as possible and make it as difficult and expensive as possible for Moscow to continue exporting crude just at the point it is extremely profitable to do so.
Ukraine has been taking a more direct approach of late, targeting key export terminals in drone attacks and seriously hampering Russia’s tanker loadings in the process.
Compared to that, diplomatic outreach to ship registers still willing to take in shadow fleet tankers may seem pretty tame, but there is growing evidence this is starting to limit the legitimate flags available to Russia.
Meanwhile, the EU states and UK are planning to step up shadow fleet seizures. That is likely to focus on the fraudulently flagged end of the fleet and, while no EU government wants to risk a lengthy legal battle or risk direct naval confrontation with Russia, officials seem confident they can make life difficult and expensive for Moscow without significant risk to their own operations in the form of Russian reprisals.
While the initial promise of that shadow fleet seizure plan has been delayed by the Hormuz crisis, the naval operations to execute these seizures remains in place and ready to go. With the Hungary blocker now removed we should expect to see action imminently.
Richard Meade
Editor-in-chief, Lloyd’s List
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